Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin33.9%
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin23.1%
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Financial Health
F
Years to Pay Off Debt36.9 yrs
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital vs Long-Term Debt-$71.8B
Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.
Working Capital-$2.3B
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Valuation
F
Margin of Safety0.0%
How far below the Graham Number the stock trades. Graham required a 33% discount as a buffer against analytical error. However, the Graham Number itself assumes 1960s-era P/E and P/B norms — for modern asset-light businesses it often understates true intrinsic value, making 0% MoS appear misleadingly bad.
Price-to-Book2.56x
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies like software and consumer brands.
Cash Flow
C
Free Cash Flow$39M
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
CapEx % of Net Income174.0%
Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.
Owner Earnings$7.2B
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
About The Southern Company
The Southern Company, through its subsidiaries, engages in the sale of electricity. The company offers electric service to retail customers and wholesale customers; and energy-related products and services to natural gas choice markets. It also develops, constructs, acquires, owns, operates, and manages power generation assets, as well as battery energy storage projects; sells electricity at market-based rates in the wholesale market; and deploys microgrids for commercial, industrial, governmental, and utility customers. In addition, the company is involved in the distribution of natural gas in Illinois, Georgia, Virginia, and Tennessee; distributes energy and resilience solutions; and invests in telecommunications. The Southern Company was incorporated in 1945 and is headquartered in Atlanta, Georgia.
The Southern Company, through its subsidiaries, engages in the sale of electricity. The company offers electric service to retail customers and wholesale customers; and energy-related products and services to natural gas choice markets. It also develops, constructs, acquires, owns, operates, and manages power generation assets, as well as battery energy storage projects; sells electricity at market-based rates in the wholesale market; and deploys microgrids for commercial, industrial, governmental, and utility customers. In addition, the company is involved in the distribution of natural gas in Illinois, Georgia, Virginia, and Tennessee; distributes energy and resilience solutions; and invests in telecommunications. The Southern Company was incorporated in 1945 and is headquartered in Atlanta, Georgia.
Metric Explanations
What each dimension measures and where the thresholds come from.
Gross Profit Margin
Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Years to Pay Off Debt
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital vs Long-Term Debt
Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.
Working Capital
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Margin of Safety
How far below the Graham Number the stock trades. Graham required a 33% discount as a buffer against analytical error. However, the Graham Number itself assumes 1960s-era P/E and P/B norms — for modern asset-light businesses it often understates true intrinsic value, making 0% MoS appear misleadingly bad.
Price-to-Book
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies like software and consumer brands.
Free Cash Flow
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
CapEx % of Net Income
Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.
Owner Earnings
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
Mr. Market is currently offering The Southern Company at $92.34.
The business passes only 2 of 6 of Graham's defensive criteria — well below his required standard.
At $92.34, the stock trades at a 144% premium to its Graham Number of $37.82. Graham would consider this price speculative.
There is no margin of safety at the current price. Graham would advise patience and waiting for a better entry point.
Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign..
Conclusion: By Graham's standards, this stock is speculative at its current price. The intelligent investor would look elsewhere or wait.
Showing Key Metrics
Income Highlights
Metric
Q3 2026
Q4 2025
Gross Profit %
55.2%▲
40.0%
Operating Margin %
33.9%▲
13.1%
Net Income %
23.1%▲
6.0%
Diluted EPS
1.76▲
0.38
Balance Sheet Highlights
Metric
Q3 2026
Q4 2025
Total Assets
$164.2B
$155.7B
Total Debt
$75.5B▲
$74.1B
Working Capital
-$2.3B▲
-$6.0B
Years to Pay Debt
36.90
178.06
Cash Flow Highlights
Metric
Q3 2026
Q4 2025
Free Cash Flow
$39M▲
-$1.7B
Owner Earnings
$7.2B
$6.3B
CapEx % of Net Income
174.0%
1,030.0%
Income Statement
2026
2025
Tax Effect Of Unusual Items
25,954
24,803
Tax Rate For Calcs
0
0
Normalized EBITDA
4,881,000
2,599,000
Total Unusual Items
140,000
97,000
Total Unusual Items Excluding Goodwill
140,000
97,000
Net Income From Continuing Operation Net Minority Interest
2,046,000
416,000
Reconciled Depreciation
1,633,000
1,605,000
Reconciled Cost Of Revenue
3,776,000
4,057,000
EBITDA
5,021,000
2,696,000
EBIT
3,388,000
1,091,000
Net Interest Income
-842,000
-895,000
Interest Expense
842,000
895,000
Normalized Income
1,931,954
343,803
Net Income From Continuing And Discontinued Operation
2,046,000
416,000
Total Expenses
5,843,000
6,064,000
Total Operating Income As Reported
3,000,000
917,000
Diluted Average Shares
1,160,000
1,109,000
Basic Average Shares
1,157,000
1,109,000
Diluted EPS
0
0
Basic EPS
0
0
Diluted NI Availto Com Stockholders
2,046,000
416,000
Net Income Common Stockholders
2,046,000
416,000
Net Income
2,046,000
416,000
Minority Interests
-28,000
75,000
Net Income Including Noncontrolling Interests
2,074,000
341,000
Net Income Continuous Operations
2,074,000
341,000
Tax Provision
472,000
-145,000
Pretax Income
2,546,000
196,000
Other Income Expense
388,000
174,000
Other Non Operating Income Expenses
171,000
41,000
Special Income Charges
140,000
97,000
Other Special Charges
-140,000
-97,000
Earnings From Equity Interest
77,000
36,000
Net Non Operating Interest Income Expense
-842,000
-895,000
Interest Expense Non Operating
842,000
895,000
Operating Income
3,000,000
917,000
Operating Expense
1,878,000
1,873,000
Other Taxes
434,000
402,000
Depreciation Amortization Depletion Income Statement
1,444,000
1,471,000
Depreciation And Amortization In Income Statement
1,444,000
1,471,000
Gross Profit
4,878,000
2,790,000
Cost Of Revenue
3,965,000
4,191,000
Total Revenue
8,843,000
6,981,000
Operating Revenue
8,498,000
6,671,000
Balance Sheet
2026
2025
Treasury Shares Number
1,000
Ordinary Shares Number
1,164,261
1,119,237
Share Issued
1,164,261
1,120,237
Net Debt
72,261,000
70,952,000
Total Debt
75,495,000
74,075,000
Tangible Book Value
36,614,000
30,555,000
Invested Capital
116,057,000
108,607,000
Working Capital
-2,282,000
-5,971,000
Net Tangible Assets
36,614,000
30,555,000
Capital Lease Obligations
1,494,000
1,484,000
Common Stock Equity
42,056,000
36,016,000
Total Capitalization
111,554,000
101,665,000
Total Equity Gross Minority Interest
44,806,000
38,867,000
Minority Interest
2,750,000
2,851,000
Stockholders Equity
42,056,000
36,016,000
Gains Losses Not Affecting Retained Earnings
-73,000
-75,000
Other Equity Adjustments
-73,000
-75,000
Treasury Stock
56,000
59,000
Retained Earnings
16,872,000
14,856,000
Additional Paid In Capital
25,301,000
15,740,000
Capital Stock
12,000
5,554,000
Common Stock
12,000
5,554,000
Total Liabilities Net Minority Interest
119,398,000
116,853,000
Total Non Current Liabilities Net Minority Interest
105,264,000
99,965,000
Other Non Current Liabilities
2,099,000
2,036,000
Employee Benefits
993,000
980,000
Non Current Deferred Liabilities
21,800,000
20,352,000
Non Current Deferred Taxes Liabilities
19,728,000
18,847,000
Long Term Debt And Capital Lease Obligation
70,782,000
66,936,000
Long Term Capital Lease Obligation
1,284,000
1,287,000
Long Term Debt
69,498,000
65,649,000
Long Term Provisions
8,860,000
8,939,000
Current Liabilities
14,134,000
16,888,000
Other Current Liabilities
1,762,000
1,673,000
Current Deferred Liabilities
503,000
475,000
Current Deferred Revenue
503,000
475,000
Current Debt And Capital Lease Obligation
4,713,000
7,139,000
Current Capital Lease Obligation
210,000
197,000
Current Debt
4,503,000
6,942,000
Other Current Borrowings
3,613,000
6,220,000
Current Notes Payable
890,000
722,000
Pensionand Other Post Retirement Benefit Plans Current
1,278,000
1,418,000
Current Provisions
676,000
662,000
Payables And Accrued Expenses
5,202,000
5,521,000
Current Accrued Expenses
658,000
807,000
Interest Payable
658,000
807,000
Payables
4,544,000
4,714,000
Total Tax Payable
1,109,000
1,004,000
Income Tax Payable
97,000
22,000
Accounts Payable
3,435,000
3,710,000
Total Assets
164,204,000
155,720,000
Total Non Current Assets
152,352,000
144,803,000
Non Current Prepaid Assets
3,648,000
3,257,000
Non Current Deferred Assets
3,109,000
2,823,000
Investments And Advances
4,544,000
4,265,000
Other Investments
3,050,000
2,947,000
Long Term Equity Investment
1,494,000
1,318,000
Investmentsin Subsidiariesat Cost
1,494,000
1,318,000
Goodwill And Other Intangible Assets
5,442,000
5,461,000
Other Intangible Assets
281,000
300,000
Goodwill
5,161,000
5,161,000
Net PPE
122,750,000
116,441,000
Accumulated Depreciation
-46,497,000
-43,483,000
Gross PPE
169,247,000
159,924,000
Construction In Progress
12,128,000
10,534,000
Other Properties
2,984,000
2,969,000
Current Assets
11,852,000
10,917,000
Other Current Assets
1,524,000
1,486,000
Hedging Assets Current
63,000
Prepaid Assets
370,000
327,000
Inventory
3,469,000
3,333,000
Other Inventories
419,000
396,000
Receivables
4,749,000
4,069,000
Receivables Adjustments Allowances
-108,000
-84,000
Other Receivables
813,000
971,000
Accounts Receivable
2,903,000
2,251,000
Cash Cash Equivalents And Short Term Investments
1,740,000
1,639,000
Cash And Cash Equivalents
1,740,000
1,639,000
Cash Flow
2026
2025
Free Cash Flow
39,000
-1,688,000
Repayment Of Debt
-3,945,000
-2,502,000
Issuance Of Debt
2,424,000
2,201,000
Issuance Of Capital Stock
1,245,000
1,533,000
Capital Expenditure
-3,561,000
-4,285,000
Interest Paid Supplemental Data
985,000
519,000
Income Tax Paid Supplemental Data
64,000
53,000
End Cash Position
1,745,000
1,640,000
Beginning Cash Position
2,990,000
3,342,000
Changes In Cash
-1,245,000
-1,702,000
Financing Cash Flow
-1,200,000
61,000
Cash Flow From Continuing Financing Activities
-1,200,000
61,000
Net Other Financing Charges
-104,000
-410,000
Cash Dividends Paid
-820,000
-761,000
Common Stock Dividend Paid
-820,000
-761,000
Net Common Stock Issuance
1,245,000
1,533,000
Common Stock Issuance
1,245,000
1,533,000
Net Issuance Payments Of Debt
-1,521,000
-301,000
Net Short Term Debt Issuance
-1,248,000
579,000
Short Term Debt Payments
-200,000
579,000
Short Term Debt Issuance
-1,048,000
0
Net Long Term Debt Issuance
-273,000
-880,000
Long Term Debt Payments
-3,745,000
-3,081,000
Long Term Debt Issuance
3,472,000
2,201,000
Investing Cash Flow
-3,645,000
-4,360,000
Cash Flow From Continuing Investing Activities
-3,645,000
-4,360,000
Net Other Investing Changes
-84,000
-59,000
Net Investment Purchase And Sale
0
-17,000
Sale Of Investment
468,000
473,000
Purchase Of Investment
-468,000
-490,000
Net Business Purchase And Sale
1,000
Net PPE Purchase And Sale
-3,561,000
-4,285,000
Purchase Of PPE
-3,561,000
-4,285,000
Operating Cash Flow
3,600,000
2,597,000
Cash Flow From Continuing Operating Activities
3,600,000
2,597,000
Change In Working Capital
188,000
516,000
Change In Other Working Capital
91,000
95,000
Change In Other Current Liabilities
12,000
366,000
Change In Other Current Assets
-105,000
234,000
Change In Payables And Accrued Expense
738,000
240,000
Change In Accrued Expense
156,000
251,000
Change In Interest Payable
Change In Payable
582,000
-11,000
Change In Account Payable
45,000
457,000
Change In Tax Payable
537,000
-468,000
Change In Income Tax Payable
537,000
-468,000
Change In Prepaid Assets
Change In Inventory
-133,000
-95,000
Change In Receivables
-511,000
-324,000
Other Non Cash Items
-319,000
-227,000
Stock Based Compensation
27,000
12,000
Deferred Tax
150,000
263,000
Deferred Income Tax
150,000
263,000
Depreciation Amortization Depletion
1,633,000
1,605,000
Depreciation And Amortization
1,633,000
1,605,000
Operating Gains Losses
-153,000
87,000
Pension And Employee Benefit Expense
-153,000
-165,000
Net Income From Continuing Operations
2,074,000
341,000
📊Quarterly mode — Graham Fair Value & 7 Criteria require annual data. Switch to Annual for full analysis.
Quarter vs Same Quarter Last Year
YoY strips seasonality
Revenue Growth (YoY)
Prior year: $7.8B▲ $8.8B+13.0%
Revenue growth vs same quarter last year strips seasonality. Consistent double-digit growth is a Buffett hallmark.
Gross Margin
Prior year: 55.0%▲ 55.2%+0.1pp
Buffett: consistent gross margin above 40% signals durable pricing power and competitive moat.
Operating Margin
Prior year: 38.3%▲ 33.9%-4.4pp
Graham: operating margin reflects true business economics before financing. Trend matters as much as level.
Net Margin
Prior year: 21.9%▲ 23.1%+1.3pp
Net margin can be distorted by one-time items, tax timing, or interest costs — compare to operating margin for signal quality.
Quarterly Health Checks
3 Graham/Buffett criteria that are valid and reliable on quarterly data
✅ Adequate Size
Graham required scale for resilience. Quarterly revenue × 4 gives an annualised proxy.
$8.8B/qtr (≈$35.4B ann.)
vs > $1.5B annualised revenue
❌ Financial Condition
Current assets vs current liabilities — a real-time liquidity snapshot. Valid and reliable on quarterly data.
0.84x current ratio
vs ≥ 2.0x
✅ Free Cash Flow
Buffett's most important single metric. A positive FCF quarter means the business generated real cash for owners after maintaining its asset base.
$39M
vs Positive
Operating Cash Flow
$3.6B
Latest quarter · Buffett's cash reality check
ROIC
1.6%
Based on latest annual operating income
Return on Invested Capital — Buffett's preferred measure for asset-light businesses. ROIC > 15% consistently signals a durable competitive advantage (moat). More meaningful than P/B for software, pharma, and consumer brand companies where most value is intangible and off-balance-sheet.
Market Cap / Net Assets
2.4x
Net Assets: $44.8B
⚠️Revenue grew vs prior year but operating margin contracted. Possible explanations: deliberate investment in growth (hiring, marketing, R&D), input cost inflation, or pricing pressure from competition. Buffett distinguishes between spending that builds moat vs. spending that doesn't.
Peers & Industry
No auto-detected peers for Utilities - Regulated Electric. You can manually compare SO against any stock using the Compare tool.
"The management of a business is its most important single factor — more important than market position, patents, or financial structure."
— Benjamin Graham
Capital Allocation & Alignment
Insider Ownership
0.10%
Low — management has little skin in the game
Return on Equity (ROE)
4.9%
Weak — poor returns on equity
Return on Assets (ROA)
1.2%
Poor — assets are not generating adequate returns
Debt Trend YoY
-2.1% YoY
Debt is declining — management is deleveraging
Leadership Team
Christopher Womack
CEO, President & Chairman
Age 67
Pay: $5,431,992
0.265% of net income
David Poroch
Executive VP & CFO
Age 55
Pay: $1,599,434
0.078% of net income
Stanley Connally Jr.
Executive VP & COO
Age 56
Pay: $2,327,228
0.114% of net income
Kimberly Scheibe Greene
Chairman, President & CEO of Georgia Power
Age 59
Pay: $2,873,203
0.140% of net income
Jeffrey Peoples
Chairman, President & CEO of Alabama Power Company
Age 65
Pay: $2,460,797
0.120% of net income
Top Institutional Holders
Institution
% Owned
Shares
Blackrock Inc.
8.08%
92,990,716
Vanguard Capital Management LLC
6.40%
73,665,124
State Street Corporation
5.63%
64,809,708
Capital World Investors
5.43%
62,518,698
Price (T.Rowe) Associates Inc
4.03%
46,415,904
JPMORGAN CHASE & CO
2.85%
32,778,201
Geode Capital Management, LLC
2.55%
29,315,285
Vanguard Portfolio Management LLC
2.35%
27,023,691
⚠️Current ratio below 1 — liquidity risk
Risk Analysis
Beta (Market Risk)
0.29
Low volatility — more stable than the market
Short Interest
2.5% of float
Low short interest — market is not heavily bearish
Debt-to-Equity
1.68x
Moderate leverage
Current Ratio
0.84x
Weak liquidity — current liabilities exceed current assets
52-Week Price Range
Low: $81.69Current: $92.34High: $99.58
Currently at 60% of 52-week range
The Southern Company (SO) fundamental analysis — Overall grade D based on profitability, financial health, valuation and cash flow. Graham's
Fair Value: $37.82. Margin of safety: 0%. Gross profit margin: 55.2%. Operating margin: 33.9%. Net margin: 23.1%. Market cap: $107.5B. Sector: Utilities. Industry: Utilities - Regulated Electric. Analysis powered by 360investing — free fundamental stock analysis based on Benjamin Graham and Warren Buffett
principles.
Disclaimer: 360investing is provided for informational and educational purposes only and does not constitute financial, investment, legal, or tax advice. All data is sourced from public third-party providers
and may be delayed, inaccurate, or incomplete. Past performance is not indicative of future results. Analysis, scores, and valuations are algorithmic and do not represent professional investment recommendations. Always conduct your own due
diligence and consult a qualified financial adviser before making any investment decision. Use of this tool constitutes acceptance that 360investing and its operators bear no liability for decisions made based on information presented here.